This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
$1 buys you full access to ALL of TheStreet's Subscription Services! Learn More

Bank Stocks to Buy Now (Maybe)

Stocks in this article: NTRSHCBKCFFN

We used different data for thrift holding companies. For bank holding companies, the table includes data from Consolidated Financial Statements for Bank Holding Companies (FR Y-9C) filed with the Federal Reserve.

Since thrift holding companies don't file a uniform set of numbers at the holding company level, we used thrift financial report data for the companies' main subsidiaries:

  • For People's United Financial (PBCT), the data is for People's United Bank of Bridgeport, Conn, although People's United holds several other thrifts, which are much smaller.
  • For Hudson City Bancorp, we used data for Hudson City Savings Bank.
  • For TFS Financial Corp (TFSL), the data is for Third Federal Savings and Loan of Cleveland, Ohio.
  • For Capitol Federal Financial, the data is for Capitol Federal Savings Bank of Topeka, Kan.

The ratio of nonperforming loans and debit securities to core capital and loan loss reserves (here adjusted for government-guaranteed loan balances) is also known as the "Texas Ratio." A level over 20% is often considered excessive, and two holding companies, Bank of America and SunTrust Banks (STI) had Texas ratios exceeding 20% as of Dec. 31.

Of course, the additional $30 billion in funds Bank of America received through the Troubled Asset Relief Program during the first quarter of 2009 are not included in the Texas ratio. After March 31 numbers become available, when we factor in the additional capital new assets from the Merrill acquisition and the government's backstop on losses from some of the Merrill assets, the company's financial picture will change.

Northern Trust

Northern Trust (NTRS) had the lowest Texas ratio on the list, coming in at 1.76%. Its strong standing is reflected in its share price and price-to-book ratio, as both are fairly expensive.

Northern Trust's numbers reflect its primary role as a private bank, with loans comprising only 37% of total assets as of Dec. 31. Nonperforming assets comprised just 0.15% of total assets -- the best overall asset quality ratio on the list.

Still, the company's price-to-book ratio of 2.48 looks quite high in the current environment, and its $1.6 billion infusion of TARP money illustrates the headline risk associated with taking the government's money, especially for a company whose business model requires it to "wine and dine" wealthy clients.

Following the media's indignation over its continued sponsorship of the Northern Trust Open golf tournament in Los Angeles, the company said Friday it would repay the Treasury all of the TARP money as soon as possible.

2 of 4

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,828.24 +0.49 0.00%
S&P 500 2,067.56 -5.27 -0.25%
NASDAQ 4,791.63 +4.3130 0.09%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs